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Excel Project Instructions;Assume ABC Company has asked you to not only prepare their 2013 year-end Balance Sheet, but to also provide pro-forma financial statements for 2014. In addition, they have asked you to evaluate their company based on the pro-forma statements and with regard to ratios. They also want you to evaluate 3 projects they are considering. Their information is as follows;End of the year information;Account;12/31/13;Ending Balance;Cash;160,000;Accounts Receivable;42,500;Inventory;63,400;Equipment;745,000;Accumulated Depreciation;292,460;Accounts Payable;36,900;Short-term Notes Payable;18,300;Long-term Notes Payable;157,225;Common Stock;450,000;Retained Earnings;solve;Additional Information;? Sales for December total 12,000 units. Each month?s sales are expected to exceed the prior month?s results by 5%. The product?s selling price is $15 per unit.;? Company policy calls for a given month?s ending inventory to equal 80% of the next month?s expected unit sales. The December 31 inventory is 9,400 units, which complies with the policy. The purchase price is $8 per unit.;? Sales representatives? commissions are 10.0% of sales and are paid in the month of the sales. The sales manager?s monthly salary will be $3,500 in January and $4,000 per month thereafter.;? Monthly general and administrative expenses include $8,000 administrative salaries, $5,000 depreciation, and 0.9% monthly interest on the long-term note payable.;? The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of sale).;? All merchandise purchases are on credit, and no payables arise from any other transactions. One month?s purchases are fully paid in the next month.;? The minimum ending cash balance for all months is $140,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.;? Dividends of $100,000 are to be declared and paid in February.;? No cash payments for income taxes are to be made during the first calendar quarter. Income taxes will be assessed at 35% in the quarter.;? Equipment purchases of $55,000 are scheduled for March.;ABC Company?s management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below.;Project 1;Project 2;Project 3;Purchase Price;$50,000;$75,000;$32,500;Required Rate of Return;12%;8%;10%;Time Period;3 years;5 years;2 years;Cash Flows ? Year 1;$18,000;$25,000;$20,000;Cash Flows ? Year 2;$22,000;$20,000;$18,000;Cash Flows ? Year 3;$22,000;$18,000;N/A;Cash Flows ? Year 4;N/A;$16,500;N/A;Cash Flows ? Year 5;N/A;$15,000;N/A;Required Action;Part A;Prepare the year-end Balance Sheet for 2013. Be sure to use proper headings.;Prepare budgets such that the pro-forma financial statements may be prepared.;Sales budget, including budgeted sales for April.;Purchases budget, the budgeted cost of goods sold for each month and quarter, and the cost of the March 31 budgeted inventory.;Selling expense budget.;General and administrative expense budget.;Expected cash receipts from customers and the expected March 31 balance of accounts receivable.;Expected cash payments for purchases and the expected March 31 balance of accounts payable.;Cash budget.;Budgeted income statement.;Budgeted statement of retained earnings.;Budgeted balance sheet.;Part B;Calculate using Excel formulas, the NPV of each of the 3 projects.;It is possible that ABC Company may not be able to complete all 3 projects. Therefore, please advise ABC Company as to the order in which they should pursue the projects (i.e. which project should ABC Company attempt to do first, second, and last).;Provide justification and analysis as to why you chose the order you did. The analysis should also be done in Excel, not in a separate document.;This assignment must be submitted as 1 Excel document.

Paper#77230 | Written in 18-Jul-2015

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